He hired a former McKinsey executive as his top economics adviser and put him in charge of the state’s business department and its $79 billion high-speed rail project.
The Newsom administration sought McKinsey’s guidance on fixing problems at the Department of Motor Vehicles, resulting in a $1.5 million contract.
The governor tapped a current McKinsey executive to lead a commission on the future of work. Newsom also relied on expertise from McKinsey during his 2018 campaign and while he was lieutenant governor.
It’s not unusual for a governor to turn to a private consultant, but California policy experts say Newsom’s approach is distinct.
Seeking outside consulting from a firm like McKinsey is typical in business and in Republican administrations, but is rare for a Democratic governor, said Thad Kousser, a political scientist at UC San Diego.
“Chief executives often rely on consultants, but it’s often part of the Republican playbook,” Kousser said.
New York-based McKinsey has a decades-long record advising industries and government. Newsom’s connections with the company are detailed in calendars The Sacramento Bee obtained through the California Public Records Act, recently updated public disclosure forms and press releases touting his advisers’ experience in the private sector.
Rob Stutzman, a Republican strategist who served as a top aide to Gov. Arnold Schwarzenegger, said seeking help from a private consultant like McKinsey is a good thing.
“I think prevailing upon that type of expertise holds great promise,” Stutzman said. “It’s exactly what Fortune 500 companies do.”
McKinsey is considered a “gold standard” in consulting, Kousser said.
The company declined to comment on its work for the Newsom administration beyond a general statement about its qualifications to advise government agencies.
The governor views McKinsey’s reported recommendations to cut costs for border operations, including by recommending slashing food budgets for migrant detainees, as “abhorrent,” Newsom spokesman Nathan Click said in a statement.
Click did not directly answer questions about why Newsom has relied on McKinsey expertise so frequently, but said the governor often seeks outside advice to improve government.
“The governor has long sought new ideas for how government can work better for the people it’s meant to serve (he even wrote a book about it),” Click said, referencing Newsom’s 2013 book “Citizenville.”
Early in his administration, Newsom pledged to give Californians a better experience at the DMV, where outdated technology prevented customers from using credit cards and the department struggled with a new voter registration program.
Newsom acknowledged problems at the DMV were eroding Californians’ confidence in government.
“The DMV is the retail face of government,” he said at a news conference in July. “There’s a reason people don’t like government. They say government cannot do its job.”
To address the issues, Newsom appointed a DMV “strike team,” which in turn hired McKinsey. The firm was chosen through a competitive selection process to make the department more efficient and reduce wait times.
The company helped the strike team develop new training for DMV employees and advised the department on how to better communicate with the public through its website.
The DMV’s $1.5 million contract with the firm has since ended, according to a copy of the contract The Bee obtained through a Public Records Act request.
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